"Fiat money is backed by men with guns; Bitcoin is not. So why should this thing have any value?"--Uber statist economist Paul Krugman.

Wednesday, February 10, 2010

News Roundup on the Decline of Union Muscle and the Rise of Its Wreckage

The poor downtrodden unions just can't seem to catch that next break to further burrow themselves into an inordinate undeserved place at the top of the workforce heap, with no other justification than their use of raw political muscle and patronage.

Boo. Hoo.

Now that "card-check" is thankfully a fading memory from early 2009 Democrat unitary government over-reach, the defeat of the union shill Craig Becker to head up the NLRB pretty much closes their backdoor route to this and other power grabs afoot from the union bosses.

Labor lawyer Craig Becker's nomination for a seat on the National Labor Relations Board failed on Tuesday afternoon, as a few Senate Democrats joined a unified Republican front to block a key Obama White House nomination.

The vote was 52-33 — 60 votes were required to proceed on the nomination. The stalled nomination is a blow to labor unions and showed fractures in the Senate Democratic Caucus, which can no longer rely on a 60-vote supermajority.

Becker has been nominated for a seat on the National Labor Relations Board, and he has strong union backing, but Republicans and a few conservative Democrats complained he was too cozy with Big Labor. The failure to get 60 votes on a procedural motion leaves the nomination stalled, and President Barack Obama has threatened to bypass the Senate and make a recess appointment if certain nominees are not confirmed.

The Democrats may yet force a recess appointment of Becker (of the exact type for which they excoriated George W. Bush), but Mr. Becker shouldn't get too cozy in the job. Just ask John Bolton how that works.

The unions' reaction is the expected one: threats.

Only this time the target is their erstwhile political chums, the Democrats.

"Here's labor getting thrown under the bus again," said John Gage, the national president of the American Federation of Government Employees, which represents 600,000 workers. "It's really frustrating for labor, and a lot of union people are thinking: We put out big time in money and volunteers and support. And it seems like the little things that could have been aren't being done."

The 52-33 vote on Becker — who needed 60 to be confirmed — really set labor unions on edge, but the list of setbacks is growing.

Union leaders warn that the Democrats' lackluster performance in power is sapping the morale of activists going into the midterm elections.

"Right now if we don’t get positive changes to the agenda, we’re going to have a hard time getting members out to work," said United Steelworkers International President Leo W. Gerard, in an interview.

Can I get a big "Whaaaah!!", anyone?

Perhaps Democrats see the writing on the wall about the future of these top-heavy, inherently parasitic organizations that push narrow political agendas far outside the realm of helping working people generally, much less their actual members specifically:

Organized labor lost 10% of its members in the private sector last year, the largest decline in more than 25 years. The drop is on par with the fall in total employment but threatens to significantly limit labor's ability to influence elections and legislation.

On Friday, the Labor Department reported private-sector unions lost 834,000 members, bringing membership down to 7.2% of the private-sector work force, from 7.6% the year before. The broader drop in U.S. employment and a small gain by public-sector unions helped keep the total share of union membership flat at 12.3% in 2009. In the early 1980s, unions represented 20% of workers.

Labor experts said the union-membership losses would have a long-term impact on unions and their finances, because unions wouldn't automatically regain members once the job market rebounded. In many cases, new jobs will be created at nonunion employers or plants.

"The bad news for unions is twofold. When times are bad they lose members, and when times are good they don't recoup those members," said Gary Chaison, a professor of industrial relations at Clark University in Worcester, Mass.

.....

Unions also suffered a big setback with a Supreme Court decision on campaign financing that removed limits on corporate spending. While unions are also free of certain limits, companies and business groups could outspend labor in the future.

Some labor experts said labor's focus on politics came at the expense of organizing. "It's a year when the labor movement focused its energies on labor-law reform and health care," said Kate Bronfenbrenner, a Cornell University labor expert.

The Democrats also saw a reality that unfolded in Massachusetts, poetic justice for union fatcats pushing job-killing political agendas from lavish dues-coerced perches :

Republican Scott Brown's victory in the Massachusetts Senate race was lifted by strong support from union households, in a sign of trouble for President Barack Obama and Democrats who are counting on union support in the 2010 midterm elections.

A poll conducted on behalf of the AFL-CIO found that 49% of Massachusetts union households supported Mr. Brown in Tuesday's voting, while 46% supported Democrat Martha Coakley. The poll conducted by Hart Research Associates surveyed 810 voters.

The finding, disclosed during an AFL-CIO conference call about the poll, represents a fresh problem for Democrats, who count on union leaders and union members as a pillar of the party's base.

Karen Ackerman, the AFL-CIO's political action director, said the results of the Massachusetts poll indicate "what we call a working-class revolt" in which voters were responding to the fact that no one was addressing their needs or interests. But she played down the support among union household members for Mr. Brown.

"Union voters are like any other voters, and they respond to the environment around them" and who they think will be on their side and fight for them, Ms. Ackerman said. "What happened in Massachusetts is that working families did not see the Democratic candidate as being on their side."

She added that the AFL-CIO has "very good success" reaching out to union voters and did have a union program in Massachusetts in support of the Democratic candidate, state Attorney General Martha Coakley. Still, she said the group does have concerns about the midterm congressional elections in November.

"Clearly, we're taking a serious look at this [working-class revolt] because, frankly, we know that 2010 elections are going to be very difficult," she said, adding that the group plans to move forward with a "very progressive political program."

Approximately 85% of the state's 235,000 employees (not including higher education employees) are unionized. As the governor noted during his $83 billion budget roll-out, over the past decade pension costs for public employees increased 2,000%. State revenues increased only 24% over the same period. A Schwarzenegger adviser wrote in the San Jose Mercury News in the past few days that, "This year alone, $3 billion was diverted to pension costs from other programs."

There are now more than 15,000 government retirees statewide who receive pensions that exceed $100,000 a year, according to the California Foundation for Fiscal Responsibility.

Many of these retirees are former police officers, firefighters, and prison guards who can retire at age 50 with a pension that equals 90% of their final year's pay. The pensions for these (and all other retirees) increase each year with inflation and are guaranteed by taxpayers forever—regardless of what happens in the economy or whether the state's pensions funds have been fully funded (which they haven't been).

A 2008 state commission pegged California's unfunded pension liability at $63.5 billion, which will be amortized over several decades. That liability, released before the precipitous drop in stock-market and real-estate values, certainly will soar.

This little horror show is repeated all around the country, almost exclusively in Democrat one-party control urban centers, large and small.

Just look at little 'ol Wilmington, Delaware in which the government couldn't bend the taxpayers over fast enough last year to ensure that the public employee unions were sated. This was the only priority in handling the budget crunch the union-friendly Wilmington pols have created after 10 years of 10% annual growth in the city government.

Forget about Wilmington's decaying sewer system or the millions in public treasure already lost to and still being thrown down the "economic development" ratholes that have fed Democrat-electing non-public-sector union interests.

Gotta make sure those perks, pensions, and patronage positions are all safe and secure.

Growing up in Michigan in the heyday of the United Auto Workers, I long assumed that labor unions were part of the natural order of things.

That's no longer clear. Last month the Labor Department reported that private-sector unions lost 834,000 members last year and now represent only 7.2 percent of private-sector employees. That's down from the all-time peak of 36 percent in 1953 and '54.

But union membership is still growing in the public sector. Last year 37.4 percent of public-sector employees were union members. That percentage was down near zero in the 1950s. For the first time in history, a majority of union members are government employees.

In my view, the outlook for both private- and public-sector unionism is problematic.

Private-sector unionism is adversarial. Economic studies show that such unions do extract premium wages and benefits from employers. But that puts employers at a competitive disadvantage. Back in the 1950s, the Big Three auto companies dominated the industry and were at the top of the Fortune 500. Last year General Motors and Chrysler went bankrupt and are now owned by the government and the UAW. Ford only barely escaped.

Adversarial unionism tends to produce rigid work rules that retard adaptation and innovation. We have had a three-decade experiment pitting UAW work rules against the flexible management of Japanese- and European-owned nonunion auto firms.

The results are in. Yes, clueless management at the Detroit firms for years ignored problems with product quality and made boneheaded investment mistakes. But adversarial unionism made it much, much harder for Detroit to produce high-quality vehicles than it was for nonunionized companies.

As economist Barry Hirsch points out, nonunion manufacturing employment rose from 12 million to 14 million between 1973 and 2006. In those years, union manufacturing employment dropped from 8 million to 2 million. "Unionism," Hirsch writes, "is a poor fit in a dynamic, competitive economy."

Moreover, federal laws passed since the 1950s now protect workers from racial and sex discrimination, safety hazards and pension failure. They don't need unions to do this anymore.

Public-sector unionism is a very different animal from private-sector unionism. It is not adversarial but collusive. Public-sector unions strive to elect their management, which in turn can extract money from taxpayers to increase wages and benefits -- and can promise pensions that future taxpayers will have to fund.

The results are plain to see. States such as New York, New Jersey and California, where public-sector unions are strong, now face enormous budget deficits and pension liabilities. In such states, the public sector has become a parasite sucking the life out of the private-sector economy. Not surprisingly, Americans have been steadily migrating out of such states and into states like Texas, where public-sector unions are weak and taxes are much lower.

Barack Obama is probably the most union-friendly president since Lyndon Johnson. He has obviously been unable to stop the decline of private-sector unionism. But he is doing his best to increase the power -- and dues income -- of public-sector unions.

One-third of last year's $787 billion stimulus package was aid to state and local governments -- an obvious attempt to bolster public-sector unions. And a successful one: While the private sector has lost 7 million jobs, the number of public-sector jobs has risen. The number of federal government jobs has been increasing by 10,000 a month, and the percentage of federal employees earning over $100,000 has jumped to 19 percent during the recession.

Obama and his party are acting in collusion with unions that contributed something like $400,000,000 to Democrats in the 2008 campaign cycle. Public-sector unionism tends to be a self-perpetuating machine that extracts money from taxpayers and then puts it on a conveyor belt to the Democratic party.

But it may not turn out to be a perpetual motion machine. Public-sector employees are still heavily outnumbered by those who depend on the private sector for their livelihoods. The next Congress may not be as willing as this one has been to bail out state governments dominated by public-sector unions. Voters may bridle at the higher taxes needed to pay for $100,000-plus pensions for public employees who retire in their 50s. Or they may move, as so many have already done, to states like Texas.

Obama's Democrats have used the financial crisis to expand the public sector and the public-sector unions. But voters seem to be saying, "Enough."

It is certainly telling that the Teamsters is still run by a guy named Hoffa. It should be of little surprise to any rational person that these bloated organizations are finding less and less success imposing themselves on savvy 21st century working people, who don't see how they are protected or served by overpaid, overfed leaders' promoting grandiose, ultra-expensive leftist political schemes while bilking public treasuries at every possible turn.

Btu you can be damn sure the unions aren't looking out for the "little guy" either, save their narrow rendition of it perhaps.

Unions create no jobs, no wealth, no innovation, no creativity. They are inherently parasitic. Their utility for worker protection is long past.

Taxing the bejeezus out of the "little guys", as public-sector unions in particular ride them like a herd of wage slaves, is as evil and twisted as any such corporate ethos you may conjure.

Perhaps they are worse, since unions put in zero stake up front. Even the evil corporations have a downside risk that unions would have us all believe unions should always be immune and insulated from, by definition.

Witness the unions' slow destruction of Chrysler and GM. Now unions practically frigging own them. It is now the leach taking over the host as reward for bleeding into torpid near-death anemia.

Good luck with that model for sustainable equitable prosperity all-around...not just in the AFSCME union ranks.